Class action targets years of Bankwest profits
Commonwealth Bank will have to fend off a class action from disgruntled former business borrowers of Bankwest, a process that will oblige the bank to continue to engage with a contested history over its management of this entity since 2008.The lawyer running the case is Trevor Hall, of Parramatta legal firm Hall Partners. Damages claimed by the plaintiffs from Commonwealth Bank, if accepted by a judge and appeal courts, may stretch beyond hundreds of millions of dollars.Four elements of the damages proposed include:• profits "referable to the growth in size and dollar value of the residential book" of Bankwest since 2008;• all "financial advantages obtained from the enhancement of the return on equity" arising from the dumping of lowly graded business loans;• the excess interest income on the loans of affected borrowers; and• the value of any "clawback" from HBOS, a concept described in the claim as "the value of any and all deductions achieved by the second defendant and by way of set off" in the share sale deed governing the sale of Bankwest.Three property developers, Portland Property Holdings (NSW) Pty limited, Peter Walsh and Australian Retirement Group Pty Limited, are the plaintiffs named in a statement of claim filed with the Supreme Court of New South Wales yesterday.Other class actions relating to Bankwest have been mooted in the past, but the proponents have been unable to reach the stage of filing a claim.This class action will revisit, perhaps in a more effective manner, material already weighed in civil cases and official inquiries over recent years.The Parliamentary Joint Committee on Corporations and Financial Services into the impairment of loans is traversing the same ground at present, with its endeavours themselves something of a rerun of a 2012 Senate committee inquiry.The group members were described by Hall Partners as prior business and corporate customers of Bankwest at or before 19 December 2008, the date on which CBA took ownership of Bankwest from HBOS in a hurried sale agreed during the worst of the GFC.Commonwealth Bank declined to respond specifically to the class action but reiterated that, in the context of recent parliamentary scrutiny on the same topic the bank "has cooperated fully with every request." "We've answered more than 50 questions on notice from the Joint Committee, provided detailed submissions and responses to other submissions and continue to work in an open and transparent manner."